Step 1: Define M&A Integration Strategy and Guiding Principles

Burn Up the Road

We’ll start with a one-question quiz: What do you think is the single best predictor of M&A integration success?

And here’s the answer: The length of the transition period.

The longer you take to integrate, the closer you live to the edge. Disappointing deals correlate highly with slow consolidation.

Decades of merger experience prove this. The turtle may win the race in fairy tales, but not in the grinding, gut-wrenching, high-risk game of merger integration. We’ve been saying this for years, and it’s coming close to being accepted now as conventional wisdom. Here’s the problem—companies still demonstrate big differences of opinion regarding what “fast” really is ...

10 Guidelines for a Successful M&A Integration

1. TRUST IN SPEED

In years past, the conventional wisdom on the integration process advocated a slow transition. The rationale went like this: This is important. We must move slowly, carefully, and minimize mistakes. We can’t afford to overwhelm people with change.

It all sounded so logical. It seemed like such a caring approach so far as the people were concerned. The problem is, the thinking was dead wrong. Basically, employees hate a slow integration process. The approach lets problems fester, and it fails to take advantage of the energy stirred up by a merger event.

Being careful during mergers and acquisitions means moving quickly. Speed is your ally. A rapid integration approach that reflects a strong sense of urgency holds far more promise than a strategy based on caution. The mistakes that come from going fast are nothing compared to the …

Move with Urgency to Re-recruit Your Keepers

If you’re involved in a merger, some of your best people in the acquired company are job hunting. Count on it.

Maybe you don’t have many who are circulating their resumes yet, but you can bet the majority are considering their options. Mergers are good at getting people’s attention. Everybody wakes up, looks around, and wonders how his or her career will be affected.

Some people can’t stand all the uncertainty and ambiguity, so they start looking for opportunities somewhere else. Others have a pretty good idea of what’s coming, but don’t like the looks of what they see. So they, too, decide to check out other job possibilities. The most talented people, of course, typically have the best alternatives. Executive recruiters aggressively seek them out, knowing that mergers always loosen the ties that bind.

Research shows that acquired firms, on the average, lose four out of ten managers during the first twenty-four months of a merger. This turnover rate is three times the rate found in companies …
 

The Power of "Opening Moves"

7 Secrets for a Kinder, Gentler M&A Integration

Beware of the integration do-gooders. 

Chances are you have a few of these people scattered across the management ranks.  I’m talking about soft-hearted managers, those misguided souls who seem to think you can run an effective integration without upsetting anyone.  These are the folks who would sacrifice integration success in order not to disturb the organizational peace.  They’re nice people and generally well intentioned.  But here’s the irony:  Theirs is the cruelest approach.

Merging two companies works best when you show deep respect for certain ground rules.  When I say “works best,” I mean these ground rules represent the most caring and benevolent way of dealing with employees, just as they offer the most promising route to merger success …
 

7 Critical Post-Merger Integration Best Practices

Many guidelines in M&A only apply to certain situations. However, these seven integration best practices should almost always be followed:

Don’t Try to Build One Common Culture

Are we saying you should trash the popular concept of corporate culture? Not at all. It’s the word “common” that needs dumping.

A few shared values...a couple of operating principles common to all parts of the new merged organization...a small handful of company-wide standards. That’s okay. That makes sense. That much you can get across to everybody and try to uphold or enforce during an integration ...